Summary: * It is the first Friday of the month, and that means that this morning we got the September Non-Farm Payroll number * Anyone who has listened to my podcasts and video blogs knows that for months I have criticized these so-called strong jobs reports * I think what's going on is a transformation of the economy from full-time jobs to part-time jobs and that necessitates creating more jobs that you destroy, but the real story is beneath the surface * The report we got today was one of the weakest reports relative to expectations than we've had in years * This may be the final missing piece to the economic puzzle that shows that the economy is not as strong as everybody, including the Fed pretends it to be * And that the rate hikes expected to be around the corner are a distant blur on the horizon * Soon more will join me in recognizing the more QE is coming * Of course QE is not medicine; it is toxic * Let's get down to the tale of the tape with the jobs numbers * First, the bigger number is the August number, which was expected to be revised up, was revised down to 136,000 jobs * July was also revised down * The September number was expected to be 203,000 and actually came in at 142,000 * This is an average of 163,000 jobs for the last 3 months * Six of the last 8 jobs numbers have been revised downward * The August labor force participation rate was 62.6, which was the lowest of the "recovery" * The September rate dropped another .2 to 62.4, which is the lowest since 1977 * Another 579,000 left the labor force in September - now there are 94.6 million Americans not working * Average hourly earnings, expected to rise .2, remained flat * In fact, the average work week declined from 34.6 to 34.5 * If you remember, what has Janet Yellen stated as a requirement for a Fed rate hike? - An improvement in the labor market. * The labor market was singled out as a reason why rates remained at zero in September * While others speculated that rates might hike in October or December, I said the labor market is not going to improve, so the Fed will not raise rates * Janet Yellen is looking at labor force participation, which has declined to a new low * Yellen is also looking for an improvement in wages - that is going the other way * If you also look at the details of this jobs report, you'll see that jobs created are low-paying jobs and jobs lost are higher-paying jobs * For example, we lost jobs in wholesale trade, manufacturing and logging - those are good-paying blue collar jobs * We gained jobs in leisure and hospitality, education and healthcare, retail trade - and a lot of these jobs are temporary or part time * This is why there is not real recovery, why people can't save or buy houses * This weak jobs number is another excuse for the Fed not to raise rates * Some are pointing to this jobs number as proof of the Fed's wisdom in not raising rates in September * However, Yellen stated that rates would go up if the economy continues to improve as the Fed expects - but the economy is getting worse * I've always said that the Fed does not want to raise rates because it does not want to look foolish if it has to back down from a rate hike * We got more economic data today: factory orders wer down 1.7% worse than the expected number of -1.3% * Also, last month's number was revised down, making this the tenth month in a row that factory orders have been down, year over year * This only happens in a recession * Maybe we are in a recession * We don't have Q3 GDP numbers yet, but yesterday the Atlanta Fed reduced its Q3 estimate to .9 * The consensus on Wall Street and at the Fed is still 2.5 * I think that given this jobs number, the downward revision of the previous month and the factory orders number in addition to economic data we're likely to get next week, the Atlanta Fed may reflect a negative estimate for Q3 GDP * If we get a negative number for Q3,
